Even insured feel strain as health-care costs rise

May 4, 2008|By Reed Abelson and Milt Freudenheim, The New York Times

The economic slowdown has swelled the ranks of people without health insurance. But now it also threatens millions of people who have insurance but find that the coverage is too limited or that they cannot afford their own share of medical costs.

Even many of the 158 million people covered by employer health insurance are struggling to meet medical expenses that are much higher than they used to be -- often because of some combination of higher premiums, less extensive coverage, and bigger out-of-pocket deductibles and copayments.

With medical costs soaring, the coverage many people have might not adequately protect them from the financial shock of an emergency-room visit or a major surgery. For some, even routine doctor visits might now take a back seat to basic expenses such as food and gasoline.

The problem is most acute for people with no insurance, a group expected to soon exceed 48 million, but those with insurance say they too are feeling the pain.

"It just keeps eating into people's income," said James Corbin, a former union official who works for the local utility in Tucson, Ariz.

Corbin said that under their employer's health plan, he and his co-workers are obliged to pay up to $4,000 of their families' annual medical bills, on top of about $1,600 a year in premiums. Five years ago, they paid no premiums and were responsible for only about $2,000 of their families' medical bills.

"That's a big jump," Corbin said. "You've just lost a month's pay."

Already, many doctors say, the soft economy is making some insured people hesitant to get care they need, reluctant to spend a $50 copayment for an office visit. Parents "are waiting longer to bring in their children," said Richard Lander, a pediatrician in Livingston, N.J.

"They say, 'The kid isn't that sick; her temperature is only 102.' "

Since 2001, the employee's average cost of an annual health-care premium for family coverage has nearly doubled to $3,300, up from $1,800, while incomes have come nowhere close to keeping up.

Factor in other out-of-pocket medical costs, and the portion of the average American household's income that goes toward health care has risen about 12 percent, according to the consulting and accounting firm Deloitte -- and now is approaching one-fifth of the average household's spending.

In a recent survey by Deloitte's health-research center, only 7 percent of people said they felt financially prepared for their future health-care needs.